【华尔街日报亚洲版】April 25 2012

VOL. XXXVI NO. 165 * * WEDNESDAY, APRIL 25, 2012 The Music Stops For Wall Street Bankers BUSINESS & FINANCE Page 17 The Music Stops For Wall Street Bankers BUSINESS & FINANCE Page 17 OPINION: Taxes for U.S. Expats Are Too Darned High Page 13 As of 12 p.m. ET DJIA 13028.09 À 0.78% FTSE 100 5709.49 À 0.78% Nikkei 225 9468.04 g 0.78% Shanghai Comp. 2388.83 À 0.01% Hang Seng 20677.16 À 0.26% Sensex 17207.29 À 0.65% S&P/ASX 200 4360.40 À 0.18% asia.WSJ.com (India facsimile Vol. 3 No. 226) Australia:A$6.00(InclGST),Brunei:B$7.00,China:RM B25.00,Hong Kong:HK$20.00(InclM acau),India:Rs30.00,Indonesia:Rp18,000(InclPPN),Japan:Yen500(InclJCT),Korea:W on2,500, M alaysia:RM 7.00,Pakistan:Rs140.00,Philippines:Peso80.00,Singapore:S$4.50(InclGST),SriLanka:Slrs180(InclVAT),Taiw an:NT$60.00,Thailand:Baht50.00,Vietnam :US$2.50 KDN PP 9315/10/2012 (031275) M ICA (P) NO.030/10/2011 SK.M ENPEN R.I.NO:01/SK/M ENPEN/SCJJ/1998 TGL.4 SEPT 1998 Facebook Stumbles Ahead of IPO As Facebook Inc. enters the final weeks before its landmark initial public offer- ing, not all of the arrows are pointing up. In what is likely to be the last snapshot of its financial condition before an expected May IPO, Facebook disclosed Monday that its first-quarter profit and revenue declined from the final quarter of 2011. The social network’s ex- penses are mounting, as it builds data centers and hires engineers to run a network for its more than 900 million users around the globe. The company also agreed to spend $550 million on a deal with Microsoft Corp. to shore up its patent arsenal amid esca- lating tensions in a legal dis- pute with Yahoo Inc. Facebook’s profit decline and rising spending show the strain the company is under as it challenges entrenched ri- vals to become one of the big- gest players in Silicon Valley. At a potential valuation of about $100 billion out of the gate, Facebook will be under pressure to quickly justify that sum to investors. The company’s first-quar- ter revenue was $1.06 billion, down 6% from the December quarter. In a regulatory filing, the company blamed the de- cline on “seasonal trends” in Please turn to page 16 BY GEOFFREY A. FOWLER AND SHIRA OVIDE Bundesbank Stands Firm On Austerity Germany’s central bank chief rejected calls for the Eu- ropean Central Bank to back off from its push for fiscal austerity, batting down mounting concern that the strategy is causing deep eco- nomic pain and escalating po- litical upheaval across Europe. In an interview with The Wall Street Journal, Bundes- bank President Jens Weidmann also made no apol- ogies for his repeated warn- ings that some ECB anti-crisis policies, including govern- ment-bond buying and looser collateral rules, threaten fi- nancial stability and may gen- erate inflation. “The crisis can only be solved by embarking on often- painful structural reforms and following up on fiscal consoli- dation,” Mr. Weidmann said. “If policy makers think they can avoid this, they will try to. That’s why the pressure has to be kept up.” The ECB has come under the spotlight again in recent weeks as Spain’s borrowing costs rose sharply. The yield on 10-year Spanish bonds is near 6%, a level some analysts think is unsustainable. Italian bond yields have risen as well. Many analysts doubt these countries can generate enough economic growth to ease their large debt burdens, and think the ECB will have to step in again, as it did last summer, by purchasing large amounts of Spanish and Ital- ian bonds, lending more to banks or a combination of the two. Such pleas for help are a concern to the Bundesbank, which worries that financial markets and governments are becoming too dependent on the ECB. “There’s an impres- sion that once an interest rate Please turn to page 14 BY BRIAN BLACKSTONE AND MATTHEW KARNITSCHNIG North Korean defectors living in South Korea release balloons carrying Choco Pie cookies and anti-Pyongyang leaflets near the demilitarized zone. The U.S. raised concerns that China is failing to enforce sanctions against the North Korean regime. Page 6 U.S. Voices Concern Over China’s Ties to North Korea Reuters A Game Australians Flip Over Loses Luster When Legalized i i i Now, People Can Play ‘Two-up’ to Mark War Dead; Some Miss Backroom Days Australians have an un- usual way of honoring their nation’s war dead: They flip coins and bet on the outcome. For years, the problem was that it had been technically il- legal for many Australians to maintain a tradition that mim- ics how World War I troops entertained themselves in the trenches or on battleships, even though Australia is home to some of the region’s big- gest casinos and billions of dollars are gambled there ev- ery year. There were regular police raids and prosecutions aimed at stamping out Two-up in the early and mid-20th century, with offenders facing fines, but those efforts became in- creasingly passive over time. Now, ex-servicemen like Robert “Nobby” Hall in Aus- tralia’s tropical north are be- ing allowed to play the game—known as Two-up—for the first time without needing to evade the law. Queensland became the last state in Aus- tralia to legalize the playing of the game as an Anzac Day tra- dition on April 25, the coun- try’s day of remembrance. “It’s as Australian as Aussie rules football—playing Two-up on Anzac Day,” said Mr. Hall, a 67-year-old Viet- Please turn to page 16 BY DAVID WINNING Inside Thinking of buying a new laptop this spring? Wait until fall, writes Walter S. Mossberg in the annual spring buyers guide. Life & Style...............9 China’s auto factories are stepping up exports, raising the stakes in key global markets by boosting competition with local brands. Business................... 17 dingbat French candidates hit trail to woo far-right voters.............. 14 dingbat Greece’s central bank sends warning to politicians........... 14 dingbat Heard on the Street: Shaking Facebook’s winter blues...... 32 Copyright © 2012, Oracle and/or its affiliates. All rights reserved. For more details oracle.com/EuroRetailer Giant European Retailer Moves Databases from IBM Power to Exadata Runs 20 Times Faster Exadata 20x Faster Replaces IBMAgain weibo.com/pdfmags 2 | Wednesday, April 25, 2012 * * THEWALL STREET JOURNAL. THE WALL STREET JOURNAL ASIA Dow Jones Publishing Company (Asia) 25/F, Central Plaza, 18 Harbour Road, Hong Kong Tel 852-2573 7121 Fax 852-2834 5291 www.wsj-asia.com SUBSCRIPTIONS and Address Changes, please telephone our local customer service hotline, Hong Kong/Taiwan: 852-2831 2555; Beijing: 86-10 6581 4090; Shanghai: 86-21 5836 8228; Indonesia: 62-21 527 7592; Japan: 81-3 6269-2760; Korea: 82-2 3700 1925; Malaysia: 60-3 2026 4061; Philippines: 63-2 848 5873; Singapore: 65-6415 4000; Thailand: 66-2 690 4222 to 7; India: 91-11 6462 0215. Or email: service@wsj-asia.com ADVERTISING SALES worldwide through Dow Jones International. Hong Kong: 852-2831 2504; Singapore: 65- 6415 4300; Tokyo: 81-3 6269-2701; Frankfurt: 49 69 29725390; London: 44 207 842 9600; Paris: 33 1 40 17 17 01; New York: 1-212 659 2176. Or email: wsja.publisher@dowjones.com Trademarks appearing herein are used under license from Dow Jones & Company. USPS 337-350ISSN 0377-9920 PAGE TWO ONLINE TODAY Most read in Asia 1. Wall Street Gets Lean 2. U.S. Saw Chinese Official as Risky for Asylum Status 3. JumpFromPaper’s 2-D Bags 4. Apple, Samsung Face Off in Smartphone Race 5. Facebook’s Growth Slows as IPO Nears Most emailed in Asia 1. Calling Truce in Mother- Daughter Conflict 2. China Grows Farms With a Global Cattle Drive 3. Wall Street Gets Lean 4. Nestlé Wins Pfizer Auction 5. Concerns Mount Over Bakrie Debt Korea Real Time wsj.com/korearealtime The ‘pop-up’ restaurant trend reaches Seoul, with two expat food bloggers offering a ‘Korean Food reimagined’ menu. Video A tour of Hong Kong via pop-up cards, with artist Tereza Hradlikova wsj.com/chinarealtime Slide Show wsj.com/indiarealtime The Hindu holiday of Akshaya Tritiya is an occasion for Indians to engage in one of the national pastimes: buying gold. i i i Business & Finance n Greece’s central bank governor warned the country’s politicians that any deviation from strict aus- terity targets after May elections would risk forcing the country out of the euro currency bloc. Mean- while, the central bank lowered its 2012 forecast for the Greek econ- omy, to a contraction of 5%. 14 n China’s Premier Wen has high- lighted trade concerns on a Eu- rope visit, in a subtle reminder of what Beijing wants in return for helping bail out the euro zone. 4 n A Chinese court is mediating a dispute between Apple and a Chi- nese company over rights in the country to the lucrative iPad trademark. 19 n Taiwan’s HTC forecast lower revenue, indicating the tough en- vironment in a smartphone mar- ket increasingly dominated by Ap- ple and Samsung. 20 n J.P. Morgan’s global head of investment banking is moving to Hong Kong and also taking on the job of Asia Pacific CEO. 23 n London jeweler Graff Diamonds plans to seek Hong Kong stock-ex- change approval for its plan to raise about $1 billion in an IPO. 23 n India is considering creating a strategic energy fund to help se- cure supplies of raw materials such as coal and crude oil to sus- tain its economic expansion. 6 n Japan Tobacco is looking to emerging markets as attractive hunting grounds for deals that wouldn’t drastically stretch the company’s coffers, incoming Presi- dent Mitsuomi Koizumi said. 17, 21 n Daiwa Securities said it ex- pects its long-unprofitable over- seas operations to break even by the end of the fiscal year that con- cludes in March 2013. 25 n James Murdoch was grilled at a media-ethics inquiry about News Corp.’s political influence in Brit- ain and his handling of a scandal over illicit reporting tactics at the company’s British tabloids. 19 i i i World-Wide n South Sudan’s president vis- ited Beijing as border fighting continued with Sudan, and Chi- nese President Hu called on both nations to back down. 3 n The disappearance of a leading opposition figure in Bangladesh has plunged the South Asian na- tion into a political crisis. 7 n A bomb blast killed at least three people and injured 20 at a railway station in the eastern Pak- istani city of Lahore. n Israel legalized three unsanc- tioned West Bank settler outposts and was trying to save another, angering Palestinians, as a U.S. en- voy was in the region for talks. n Rebels seeking to topple Syrian President Assad killed three re- gime officers in separate attacks around Damascus, activists and state media said. Afghanistan’s President Hamid Karzai, right, receives a gift from Australian Governor-General Quentin Bryce during a meeting at the presidential palace in Kabul. Zu m a Pr es s Inside World News: U.S. saw asylum for Chinese police chief as risky. 4 The Euro Crisis: French candidates court Le Pen voters. 14 In Depth: Stress rises on Social Security program. 15 Deal Journal Asia: Japan Tobacco turns over a new leaf. 17 What’s News— weibo.com/pdfmags THEWALL STREET JOURNAL. Wednesday, April 25, 2012 | 3 WORLD NEWS Sudans Fight as China Urges Restraint Sudanese fighter jets struck po- sitions along the disputed oil-rich border with South Sudan as politi- cians on both sides rekindled talk of war, while the south’s president vis- ited Beijing to build an alliance with an investor whose support could help keep both nations afloat. South Sudan on Tuesday accused Sudan of attacking villages, oil wells and troops on its side of the border, while Khartoum said it was attack- ing rebels only on its own territory. The fighting is the latest chapter in a decades-old conflict that has sim- mered since South Sudan’s seces- sion in July left many issues unset- tled, including the demarcation of the border. The violence has frustrated for- eign powers who hoped peace be- tween the two east African nations and smoothly functioning oil pro- duction would help alleviate pres- sure on global crude prices. China, in particular, has invested in Sudan’s oil industry, but conflict has compli- cated its efforts to ramp up imports. With Ugandan officials threaten- ing last week to enter the conflict if Khartoum fulfilled its vow to attack the South Sudan capital of Juba, al- lies of both nations have voiced con- cern that a widening war would fur- ther destabilize the region. Chinese President Hu Jintao, meeting on Tuesday with South Su- dan President Salva Kiir, called for restraint. “China sincerely hopes that South Sudan and Sudan can be- come good neighbors who coexist in amity and become good partners who can develop together,” Mr. Hu said, as reported by Chinese state television. South Sudan said Sudanese war planes bombed army and civilian positions overnight Monday and into Tuesday, and targeted, but missed, oil installations. Over a dozen people were injured in the bombings, said Col. Philip Aguer, South Sudan’s army spokesman. “It’s a declaration of war, but we have the capabilities to defend our territory,” he said. Sudan’s government spokesman, Rabie Abdelaty, said Sudan’s ground troops and air force were purging its border areas of South Sudan- backed rebels. He denied Sudanese troops had crossed into its neigh- bor’s territory, although both sides differ on the precise location of a shared border. The rebels, from Sudan People’s Liberation Movement-North, fought alongside the south in the two-de- cade civil war that ended in 2005. After secession, the rebels main- tained bases in Sudan’s oil-rich South Kordofan border state and continued to fight for control of the territory, which they believe should have seceded with South Sudan. South Kordofan is the only state with vast oil fields that remained in Sudan after the split, which left the south dependent on Sudan’s pipe- lines and ports to export its oil. Sudan says the rebels are still backed by South Sudan and Uganda, but the two say they have severed ties with the group. Both Sudans, analysts say, could be using the conflict with a hostile neighbor to unify shaky domestic support, tamp down on insurgencies and divert attention from economic challenges. Yet the governments in Khar- toum and Juba have also limited their attacks. “There have been plenty of red lines that haven’t been crossed,” said E.J. Hogendoorn, the Horn of Africa project director for the Inter- national Crisis Group. “If this had escalated, one of the first things you’d expect to see is Khartoum to hit the airport in Juba, for example, or to bomb other strategic facilities in South Sudan.” China, which for years has taken the bulk of oil exported from Sudan and its former breakaway province, is hosting the new country’s presi- dent for talks this week on energy and infrastructure projects. Beijing has offered to help build an export pipeline and provide tech- nical help once the crisis with neighboring Sudan eases, according to South Sudan’s deputy chief of protocol Gum Bol Noah, who accom- panied President Kiir to Beijing. The pipeline could cross neighboring Kenya, Mr. Noah said. China is by far the largest buyer of Sudanese crude, imported about 260,000 barrels a day last year, making Sudan its seventh-largest supplier. Shipments fell sharply af- ter South Sudan suspended its 350,000 barrels-a-day production in January because of a disagreement over how much it should pay Sudan for transporting oil to its seaport. South Sudan last week withdrew its troops from a disputed oil town known as Heglig, but the fight there left oil facilities in rubble, according to Sudan’s oil ministry. In the south, 40% to 60% of oil wells have since been damaged by bombings and fighting, Mr. Noah said. —Solomon Moore in Nairobi and Liyan Qi in Beijing contributed to this article. By Nicholas Bariyo in Kampala, Uganda, andWayneMa in Beijing South Sudan President Salva Kiir, in hat, participates in the opening of his new nation’s embassy in Beijing, with Chinese Vice Foreign Minister Zhang Zhijun. Xi nh ua /Z um a Pr es s Villeret Collection Equation du Temps Marchante Limited edition of 188 Running equation Perpetual calendar Patented under-lug correctors White grand feu enamelled cambered dial Ref. 6638-3631-55B www.blancpain.com BLANCPAIN BOUTIQUES ABU DHABI · BEIJING · CANNES · DUBAI · EKATERINBURG · GENEVA · HONG KONG · MACAU · MADRID · MANAMA MOSCOW · MUMBAI · MUNICH · NEW YORK · PARIS · SEOUL · SHANGHAI · SINGAPORE · TAIPEI · TOKYO · ZURICH weibo.com/pdfmags 4 | Wednesday, April 25, 2012 THEWALL STREET JOURNAL. WORLD NEWS: ASIA U.S.SawAsylumforPoliceChief asRisky WASHINGTON—The former po- lice chief in the Chinese city of Chongqing would appear, on the face of it, a good candidate to re- ceive diplomatic protection or polit- ical asylum from the U.S., due to his access to senior Communist Party officials and intelligence. But to the Obama administra- tion, which needed to decide Wang Lijun’s fate in early February due to his role in a widening political scan- dal inside China, the decision was murkier. U.S. officials have risked con- frontation with Beijing before over how to handle Chinese citizens. Dur- ing the 1989 Tiananmen political up- rising, Chinese dissident and democ- racy advocate Fang Lizhi was granted sanctuary in the American embassy in Beijing; he remained for more than a year. With Mr. Wang, however, asylum or some sort of refugee status was never seriously an option, said ad- ministration officials briefed on the case. Chinese officials detained Mr. Wang after he left the embassy, and according to Chinese media, he hasn’t been seen since. In the past, some foreign nationals, such as Mr. Fang, were granted safe haven in U.S. missions in part due to con- cerns they would face persecution if returned to local authorities. The same case could appear to be have been made for Mr. Wang, though the U.S. officials have maintained that they were guarding Mr. Wang’s safety by turning him over to cen- tral authorities. Current and former U.S. officials say Mr. Wang’s case was far differ- ent from Mr. Fang’s, and say they see little reason on human rights grounds for sheltering a local police chief who was allegedly offering de- tails of local corruption. By dashing to the U.S. Consulate, Mr. Wang risks charges of treason in China, a crime that carries a long jail sentence and possibly death. China is obsessed about state se- crecy—even the leaking of routine economic data is regarded as a grave offense—and analysts say Bei- jing would have been alarmed at a pile of internal Chinese documents relating to a senior leader and inter- nal political and security issues fall- ing into American hands. Analysts say the U.S. State De- partment, by stressing that Mr. Wang left the consulate of his own accord, was clearly sensitive to the human-rights dimensions of the case. Mr. Wang himself is widely be- lieved to have fled to the consulate because he feared for his life after falling out with Mr. Bo. His main concern, according to many ac- counts, was to leave the consulate in the custody of officials from Beijing, rather than Chongqing. Candidates for asylum must not be suspected of committing criminal acts or being involved in politically motivated violence, according to U.S. officials and government regu- lations. American diplomats are pre- vented from offering political asy- lum to a foreign national until the person is physically inside the U.S. or at a port of entry. The State Department came to believe that as Chongqing police chief, Mr. Wang had played an “en- forcer” role in carrying out some of the more controversial policies pro- moted by his then-boss, Bo Xilai, the megacity’s top Communist Party of- ficial, according to U.S. officials. During a 30-hour stay at the Ameri- can Consulate in Chengdu, Mr. Wang gave U.S. diplomats information about the death of a British busi- nessman, Neil Heywo